tv [untitled] February 22, 2012 4:30pm-5:00pm EST
loopholes, broaden the base, simplify the tax code. it's music to my ears. why isn't it in this year's budget? >> as your cleeolleagues know, had to spend a lot of time trying to talk your colleagues out of defaulting on the country and the government. we lost a little time. the supper committee wanted to take a run at it. we gave them a bitter time. >> i'll reclaim my time. i was mildly encouraged by your answer. i was fully expecting you to blamement bush for it. i'm glad it's your fault. >> i'm saying we've got a limited amount of time. >> if we're starting to talk about preventinging other countries from attracting american businesses through unusually low tax rates, that philosophy concerns me. that same philosophy could be applied domestically as well as internationally. i work in a state that works
very hard to lure business to south carolina with a favorable tax environment. i'd be very concerned if this administration starts using this language, not only internationally but domestically as well. >> i can assure you no risk of that. >> ms. wasserman schultz. >> first of all, i want to associate myself with the remarks of my colleague from florida, ms. cast or related to taxpayer identity theft and the resources the treasury expends in pursuing that. we have the worst problem in the country in florida. i can't tell you the exponential increase in calls from constituents to my office. a lot of our casework now is helping constituents comb through the morass of having to untangle the identity theft impact on their lives. and so it's really important that -- >> couldn't agree with you more. we're happy to spend some time walking you through what the irs thinks we can do and what more
we might need in terms of authority. >> that would be great. >> specifically though, and i had a chance to talk to mr. sooins about this as well. i was glad to hear some of our colleagues on the other side of the aisle in reference to their grandchildren and the concern that they have about the long-term impact of deficits on those -- on their grandchildren's lives because that to me means there's an opening for them to oppose the extension of the '01 and '03 bush tax cuts for the wealthiest and most fortunate americans which adds $700 billion to the deficit. hopefully those who made those remarks will look at their own record because they certainly have been participants, willing, very enthusiastic participants of adding to the deficit in recent months. but my question of mr. sooins yesterday, and i want to ask you to proffer your opinion, in terms of the balance that the president proposed in his budget
in dealing with the deficit short-term and long-term, there is a cut side of the ledger and a revenue side of the ledger. the economic experts, the folks who have testified here, have all cautioned about the potential for short-circuiting the recovery that we're on, the 23 straight months of private sector job growth. can you talk about the balance that the president took in proposing the budget the way he did? in the alternative, the way we've heard others propose that we shoulders senlly get to deficit reduction purely through cuts? >> okay. two really important questions in this context which is can you do fiscal consolidation responsibly without doing anything for growth in the short-term and without a balanced act that includes revenue. our judgment is no.
the reason we teal that, we have an economy still heeling from the financial crisis. growth is not strong enough to bring the unemployment rate down as fast as we think is fair to the american people. that's why we proposed like we did in the payroll tax cut and as we proposed in the last three years, a series of targeted measures to help job creation right now. you have to do those in a way that's responsible. you have to make sure you pay for them, and you want to make sure they're tied to long-term reform so people have more confidence and we'll go back to living within our means. that's why we propose the combination of near term things for growth today married with long-term reforms to meet our long-term deficits. the second key thing for growth, although we tend to disagree on this, should you do it with a balanced package, modest revenues, more spending cuts or a spending cut only approach. >> the ratio of spending cuts to revenues is $2.50. >> two and a half to one. some say three to one.
if you do it with no revenues, you have to ask yourself if you'll hit the same deficit targets. your side wants to go much deeper on the deficits. then you cut spending much more deeply. you will find it very hard to find $1.5 trillion to $1.9 trillion in spending cuts from defense, from medicare, from low-income program ts, from infrastructure. even if you try to do it, you'd probably do a lot of damage to the economy. >> just in my final 45 seconds as we've heard expressions of reverence to ronald reagan and his approach to deficit reduction in addressing economic recessions, i want to quote him in 1985, we're going to close the unproductive tax loopholes that allowed some of the truly wealthy to avoid paying their fair share. in theory some of those loopholes were understandable. in practice they sometimes made it possible for millionaires to pay nothing, while a bus driver was paying 10% of his salary.
and that's kras sive. it's time we stopped it. i couldn't have said it better myself. i yield back the balance of my time. >> i'll take the ten seconds to simply say he was selling tax reform at that time, presidential leadership saying lower rates, broaden base. precisely what we would love to say. >> mr. chairman, if i could take five seconds on that. as part of that i think we should remember that some of the adjustments he made was to tax capital gains and dividends at the 28% level, the same rate that the bus driver that was paying there. in other words, he wasn't showing preference to hedge fund owners and others. he said everybody needs to be treated equally. i would be interested -- >> actually below 30%. >> 28% level verses 15% for the hedge fund guys today. >> appreciate the questions and the discussion of balance. i had a question i ask of the administration representative yesterday and tried to get an answer. be finding balance is spending
that's less than or equal to revenue. that's about 99% of americans probably probably agree with that. when does if obama budget balance? >> it doesn't balance in the next ten years. that's the only thing we project. i think in the republican budget -- >> does it balance in the next 20 years? >> in the republican budget it balances in 2037. >> does it balance in 25 years? >> it depends what choice the congress makes. >> in your budget when does it balance? >> we only forecast for ten years. you're right we don't achieve balance in ten years. we don't know how to do that just like you guys couldn't. >> the answer is never does it balance. -- you probably wouldn't say that word. a lot of times we hear information from you, mr. secretary, about what it's going to do with the economy if we do the following initiatives or if we don't. and tomorrow will be the third anniversary of what you and the
administration projected would be the economic salvation of this country. that would be the passage of the stimulus package. and i wonder if we could put a chart up to see what the results have been from that package. sf you look at that chart, this is the prediction from your office, from your president of what would happen if we passed this stimulus package again, again, the third anniversary is tomorrow, and you find out that it didn't work. mr. secretary, you were wrong -- you find out the end here. these are just numbers. when you get to the end you see we have an obama jobs deficit of 5.4 million americans, 5.4 million americans without a job based on your economic theory. look at that unemployment rate. we were promised at this time we would be almost 6% unemployment. we're well above that. again, the obama jobs deficit is
5.4 million jobs. i know you have many proposals in the budget that hopefully would tackle the jobs deficit that's been created by i think bad economic policy. can you tell me which tax increases that you're proposing, which tax increases will help eliminate the obama jobs deficits? which ones will create new jobs for americans? >> let me start by referring you to cbo's analysis or the republican economist who is john mccain's economic adviser's analysis of the economic impact of the recovery act. they both agree that the recovery act helped substantially in restoring growth to the dmee and saved millions of jobs. >> my question was about tax increases. these are your numbers. they're not mine. i was not up here. we can blame everybody in the room. but some of us weren't here. can you explain which tax inkrooess will close the obama
jobs gap. we were promised an additional 5.4 million jobs that didn't appear. can you describe which tax increase would help? which one will put 5.4 million americans back to work? >> i want to first dispel you of the illusions in your presentation. >> mr. secretary, this is your number, not mine. this is your number. >> if the gentleman will yield. it's the romer and bernstein presentation. so it came from the administration. >> it's not really the right question. the right question is did the recovery act. >> answer the correct question, mr. secretary. >> mr. secretary, these are your numbers. and the numbers in your budget are based on a similar philosophy. tell which tax increase also create new jobs. >> the budget contains a comprehensive and balanced set of reforms, both spending and tax reforms combined with investments that in our judgment, and you can ask cbo to judge it -- whether it would be good for growth or not.
we're very confident it would be good for growth. >> honestly i hope you're right. but you're 5.4 million jobs wrong. you've been wrong again and again and again. for this room it's about numbers, for people in america it's about real jobs for their families. >> i would say an adolescent perspective on how to think about the impact of economic policy. the right question is -- >> mr. secretary, let me tell you a quick story for someone that's actually been in the private sector and helped create jobs. i know that's not your background. you've never started a business. i understand. joe in junction city said if the president raises the capital gains tax, there's seven people in junction city kansas he won't hire because of your tax increases. you can say that's not really what's going to happen. you tell joe in junction zitity that, no, we're going to create jobs without racing taxes. it didn't work in the stimulus package. i don't think it's going to work again. thank you, i yield back my time. >> mr. akita.
>> thank you, mr. chairman, thank you, mr. secretary. can we go back to figure eight please? i guess not. figure 12? >> you can start. i'll catch up to you. >> i just want to understand -- this has been alluded to a few times. figure eight is fine. these are the numbers we projected from our budget last year, and it's in contrast to what would happen if we did nothing. so you say with -- as you mentioned earlier, the baby boomers retiring at 10,000 per day, you can see what happens. then we go to figure 12, please, and that's your chart, i believe, and it correctly indicates the plateau that you talk about within the ten-year budget window where you claim to
stabilize the debt to gdp ratio. you see a similar tidal wave after that. now, from that i take that you and the administration are prioritizing a constituency in the here and now. republicans, democrats, americans in the here and now, whoever they are, that can vote for you, vote to reelect you, vote to reelect or punish all of us now at the expense of a constituency that will never reward any of us. >> no, i don't agree with that. >> that will never reward any of us. whether they're republicans or democrats, they don't exist yet. they're the children of tomorrow. they're the children of my two boys. you don't agree with that. go ahead. >> i don't agree with that. >> how so? >> maybe we can go back to figure eight for a second. >> what's interesting about that
chart, once you get past the next ten years, why does your green path, you call it path to prosperity, why does that question klein? the reason why it declines, i apologize for saying it this way is because you guys proposed to take hundreds and hundreds and hundreds of billions of dollars out of low income and middle class retirement programs. and that's why you get that number down. now, the reason we're having this debate is because we don't think that's the fair right way to do it. now, you all are invoking your children which of course i respect. i have children, too. and i spent my life in public service. i'm in this job because i care so much about the basic economic future of the country. we share that basic obligation. i would just make the suggestion that as president reagan recognized, and i think most presidents have had to confront, you cannot govern a country if
you commit never to raise taxes on anybody because things change, wars happen, crises happen and millions of americans are retiring. >> if that's the kaerks i'm reclaiming my time, thank you, mr. secretary. if that's the case, what is the proper amount for a federal government to confiscate from its people in order to run its operations? >> well, in our budget -- that's a good question, although i wouldn't use that word. >> you're confiscating property. you're confiscating the work and the money of individual citizens to run your operations, and if the current level is not accurate, it's not appropriate, what is appropriate if it's arbitrary. what is the appropriate amount for a federal government to confiscate from its own people in order to run itself? >> can i ask this question. do you think a tax to pay for a defense budget -- >> i'm reclaiming my time. this is a simple question. if we're wrong, if we're not taking enough, what is the proper amount to take? >> in our question, since you're
not using confiscation again -- >> what amount is it proper to confiscate? >> in our budget, if you were to adopt it, revenues would rise to slightly more than 20% of gdp by the end of the decade which is lower than the revenue forecast implied from the policies in the simpson-bowles plan for which many of you have showed so much affection. >> so about a fifth, a fifth of the gdp is appropriate. >> slightly higher than the historic average. >> right now we're a little below average, historically it's been about 18% to 20%. so it's not a revenue problem historically that we have, it's a spending problem if you agree with that figure or if you agree with your own figure, figure 12. >> we proposed to reduce spending to a little higher than 22% of gdp. the reason why it's that high is because americans are retiring. now, we can't suspend the
reality of people retiring, and because we give medicare and social, that causes the spending levels to rise. >> i yield back. >> mr. lankford. >> thank you for being here, nice long day. you're almost done. i do agree with you, by the way. this is a long-look issue. we have a lot of people retiring right now. we have to make sure that safety net is there, make sure medicare is there, social security is there. a lot of the issues we face are budget issues based on population right now. we get that. so this can't be something immediate, we're going to solve it tomorrow. my concern is, and we talked about this last year, the term primary balance and sustainable debts and deficits, gives the clear impression we will never balance, and we never plan to pay down principal ever. i understand the process of boying bonds and bills and all that. i understand it's not like a
mortgage. but there is some concern to say, if the whole focus of the administration is let's try to get us to a spot that we can handle this, we're never planning to ever pay down principal ever. is that -- is there something inherently bad about balancing the budget? >> that's not quite fair, again, because if you get the deficit as we proposed to below 3% of gdp and hoetd it there, you do start to bring the level of debt down as a share of the economy. >> real dollars. i understand you're mixing the numbers trying to get below 3% gdp. is it wrong to ever actually balance the budget? should that be a goal, to balance the budget? >> i don't think i would say it's maybe not the ultimate way to think about it. i'd guess i'd say you've got to start -- you're starting from somewhere now. it is hard to imagine governing a country. just think about world war ii,
not to mention the average recession. >> that's an anomaly dealing with world war ii and the recession. >> these wars are pretty expensive, too. >> at any point in the future is it an idea to say this should be our goal as a federal government, to balance our budget? >> again, i would not -- over the long run, i would not try to talk you out of having an objective to try to get to balance. i wouldn't try to talk you out of that. but it's all in how you get there and, frankly, how much flexibility you leave the chief executive and the congress to deal with the unanticipated war or recession, a huge dechl graphic boom. >> i understand. so -- never mind. let me ask about a couple things that just came up there nah i'm not sure we've addressed. one thing is the energy taxes. can you be more specific? it's fairly vague as to whether that target is, $40 billion. >> we're pretty specific in a budget in a series of tax
reforms the energy secretary which would reduce and remove a fair amount of expensive subsidies. >> give me a specific tax. there's eight -- for instance, on the traditional fuels, eight major there, and which pieces would you eliminate? >> do you want me to read from the budget? >> well, about the drilling costs -- >> well, it is better for me to do it in writing for you and i can't pull it out right now. >> and let me tell you why. because some of it is a concern for me and the president was clear and i am glad he was in the state of the union address saying we need to be above the domestic energy, and the increase in the production which is a good thing for us as a state. here's the concern, if we now say great that's good that we are getting more production and let's tax that mo, do we get less of that or more of that as we tax? >> good question, and thoughtful way to look at it. we are in the middle confident that we will see a
huge expansion of energy in the country from oil and natural gas that will come from a long period of otime. now, the effective tax rate paid by the energy sectorday today n the high teens. >> that is because we have huge capital coming online? >> well, i don't agree with the economics of it, but it is true that we are proposing to increase the effective tax rate to be closer to the average that everybody else pays, because we don't believe that there is a compelling case for that generous of a subsidy to the oil industry, but we are proposing to dial it back, but it is not a r risk to get in the way of the huge boon in energy exparticular ration and production in the united states. >> i disagree with you, but a it is capital intensive and most of the production is coming from the smaller producers. the larger companies such as exxon and such are different than the bulk of the production
that is done nationwide from very small companies, 12 to 40 people in a lot of the companies, and this very capital intensive focus, they have to have it, and the model is built on that, and if that goes away, so does the production. >> and even with the changes, and we will talk about this with more changes, but wechb teven w changes can, and the mixed equi te of debt, and the capital industry will be favorable still in the energy, and quite favorable in energy, and less favorable than today. >> well, that is a tough gamble when we are starting to get back on top of it. with that, i yield back. >> nine minutes off. how are we doing? >> we are done? >> yes. >> you want to keep going. >> we said 4:30 and it is 4:39, and let me close by saying that we see things differently, and we will have to agree to disagree on some of these things, and we will have you back again. >> can i say one final word.
>> this could go on for a while. go ahead. >> i think that you can embrace it. >> okay. >> we, if you listen carefully to the debate, as i know you do, and you look at how much democrats have moved on medicare and medicaid and other mandatory to date, it exceeds the amount of movement that you have shown on revenues for the high end. so if you can come a little closer, and we can get a little closer, but we are not there yet. >> and backroom deals are not what the american people are looking for, but looking for budgets that show the country what we believe n and looking for us to lead, to govern, to propose ideas and then to get things done. that is what we are trying to do. the friends in the senate aren't even trying. you put a budget out, and that is the law, and you did that, but your descriptions of your budget we just take issue with. i think that we can have a better economy through the broad-based low rate tax reform,
and you can agree with that and get a higher share of taxes from the higher earners with a better tax system that doesn't compromise growth. >> not without the modest increase in the effective tax rate. but we will get there. i am sure we will. >> all right. you are really, really want to have that last word, aren't you? i am not going to let you have it. this hearing is adjourned. [ laughter ]
that wraps up treasury secretary geithner as he testifies about the president's 2013 budget request. a reminder that you can read the president's budget proposal at the website cspan.org. here's a look at some of the prime time programming. at:00 on c-span, speeches from the recent world economic forum in davos, switzerland. and then at 7:00 p.m., on c-span 2, author david unger talking about his latest book "the emergency state." and here at 8:00 on c-span3, a look at the history of u.s. space policy. there is a new website for american history tv where you can find our schedules and preview the upcoming videos and series, and access the history tweets, history in the news, and social media from facebook, youtube, twitter and four
square. follow history tv all weekend on cspan.org and c-span3.tv. the nation's governors are headed to washington, d.c. this weekend to attend the winter meeting of the national governors association. our live coverage picks up saturday at 10:00 a.m. eastern with the opening news conference. we will show you also a discussion on the growing state economies. as the governors convene in the nation's capital, we thought we'd take the opportunity to show you state of the state speeches from around the country. nex it is pennsylvania republican governor tom corbett. he delivered his speech earlier in the month, and his speech is about 35 minutes. [ applause ] >> welcome to the hall of the hous house. >> thank you all.
>> thank you all. speaker smith, president protem, and lieutenant governor jim call cally and to members of the distinguished cabinet and follow citizens. pennsylvanians are people who embrace important qualities. we value service. we value bravery. we value compassion. we saw these virtues on display last year when floods hit our state. our first responders are firefighters, police, our men and women of the national guard stepped into the breach to prove once again that ewiwe are a commonwealth and act for the common good. in our county, robert spitco, a firefighter, from the county
across the state learned of a woman who had been swept away. they tethered themselves to the rescue ropes and went through the swift and rising floodwaters, and they found that woman clinging for her life to a sapling. they brought her back safe. in lycoming county, there were calls received about a woman and two children ages 3 and 7 stranded on the roof of their home. the buildings around them had already been swept away. these brave men and women guided, excuse me, these brave men fieded a hovercraft through the waters at nighttime and took that family to safety. i'd ask those gentlemen who are seated here in the back of the room to please stand and be recognized.